Charter is cheaper, but read fine print

TRANSPORTATION & TRADE

There are reasons for the old expression "you pays your money, you takes your chances."

Take charter airlines, for example.

Public charters offer nonstop flights at affordable prices. They can be a smart travel investment -- if you're an informed consumer who can be flexible.

Charter flights can be purchased from a tour operator, a travel agent or directly from the charter airline. Typically, charter programs impose conditions not set by commercial airlines, which usually charge more but offer more assurance of getting you to your destination.

A tour operator or travel agent must provide a contract that spells out the customers' risks and rights. But read the fine print.

With charter flights, for instance, the tour operator or airline can cancel for any reason until 10 days before departure. The operator simply may not sell enough seats on that flight and decide to cancel it. Even after 10 days, it can be scrapped if weather, mechanical difficulties or other problems ground the plane.

Charter flights sometimes experience last-minute schedule changes and departure delays. A charter flight can be delayed nTC up to 48 hours before the charter operator must offer you the option to cancel with full refund.

"There are delays and cancellations, and it's not uncommon," said Jay Ellenby, vice president of Safe Harbors Inc. travel agency in Baltimore.

Unlike regularly scheduled air service, you can't just reschedule on the next available flight.

Under federal regulations, money collected from charter customers must be placed in escrow accounts until the customers complete their trips. The accounts serve as insurance policies for passengers if the flights are canceled.

But even that's no guarantee -- as passengers of Republic Air Travel recently discovered.

Republic was a Dallas-based travel agency that had been arranging low-cost charter flights around the country. Its flights from Baltimore-Washington International Airport to Florida started at $49, compared with the $99 lowest fares on major U.S. airlines.

In November, the U.S. Department of Transportation accused Republic of diverting hundreds of thousands of dollars from the escrow accounts to cover its operating expenses.

The department also said Republic failed to make refunds on time, illegally canceled flights and gave consumers inadequate notice about cancellations.

Legal proceedings got under way in November as Republic conducted business as usual. Three months later, Republic suddenly went out of business, leaving thousands of people holding worthless tickets. Federal investigators still don't know how much, if any, money was in escrow accounts.

Republic, which had advertised heavily in several metropolitan areas since last summer, had booked flights through mid-June.

In the charter business, Republic is a bad apple. Of the 921 public charter programs, only a handful have had such problems.

Still, with the proliferation of discount fares, it might be wise to explore prices offered by regularly scheduled carriers before subjecting yourself to the risks of a charter operation.

"Charters are great if you understand them and use them correctly," Mr. Ellenby says. "Nevertheless, consumers need to be informed."